The Federal Trade Commission warns borrowers to obtain any verbal agreements with your lender in writing, including an agreement for partial payments. Otherwise, you must abide by the payment requirements stated in your original contract. The state of Texas doesn't allow "breach of peace" during the repossession process, such as threatening you or taking the car from a closed garage, but the lender sets the terms for the vehicle repossession, which you agreed to when you signed your contract.
Review Your Contract
To determine when and why your lender can repossess your vehicle, read your contract. Your contract states your payment amount and how many days without payment warrants a repossession. You might find that your lender can repossess the vehicle after a payment is one or up to 30 days late. Some lenders also repossess a vehicle for lack of insurance coverage. If your payment is later than the allowable time period stated in your contract, your lender is within its legal rights to repossess the vehicle.
Payment Deferment
Call your lender before you decide to start paying partial payments. Ask to have your payment deferred, which might help you to remain current on your loan payment. If your lender agrees to defer one or more payments, the missed payments are added on to the end of your loan term. You won't pay late fees during the deferment and your lender won't report the late payments to the credit bureaus. If your lender agrees to defer your payments, obtain the agreement in writing. Otherwise, the terms of your original contract still apply.
Loan Modification
Consider modifying your loan to avoid repossession. If you're nearing the end of your deferment or still can't catch up with your payments, your lender might change the terms of your loan to help you avoid repossession. You might have to prove financial hardship, such as unemployment or disability. If your lender approves a loan modification and a payment deferment, your new payment might not be due until months later. Your interest rate and term may increase, but you'll pay a lower monthly payment. You must sign a new loan contract to cancel the terms of your old contract. Keep a copy for your records.
Warning
Don't assume your lender will accept partial payments. Your lender may still repossess the car even though you're trying to pay. Contact your auto loan provider as soon as you know you can't afford your car payment. Some lenders only allow a payment deferment if the loan account is current, meaning you can't have a recent history of late payments. If you don't abide by the terms of your new contract, your lender can still repossess the vehicle.
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